What will an ADU do to your property taxes and resale value?

A house in South Pasadena stands next to its garage, which has been converted into a 500-square-foot ADU for the homeowner’s mother. That’s why there are different ways to estimate the value of an ADU — one used by property tax officials, others by lenders and home buyers. Stephen R. Whitmore, the public information officer for the L.A. County assessor, said the process of determining the ADU’s value is straightforward: “Our staff will determine the cost to build it.” That cost will be tacked onto your property’s current assessment and taxed annually; the county taxes property at a rate of 1%, and local parcel taxes and other levies increase the toll by roughly 0.25%. After construction, she said, one appraiser valued the property at $1.4 million — essentially, discounting the ADU’s value by 50%. “My appraisers gave it a value of $1.9 million because of the incredible marketability and rental income” that the ADU offered, Stower said, adding that the property was three blocks from Warner Bros. Studios.